GM to Report Q1 Earnings as Sales Rise and Wall Street Awaits Details on Cost-Cutting Measures and EV Production

GM to Report Q1 Earnings as Sales Rise and Wall Street Awaits Details on Cost-Cutting Measures and EV Production

General Motors (GM) is set to release its first-quarter earnings on Tuesday, and according to the Refinitiv consensus estimates, adjusted earnings per share are expected to be $1.73 with revenue of $38.95 billion. While this would mark a significant decline in adjusted EPS from last year, it would represent an 8.3% increase in revenue as vehicle profits normalize from the inflated levels seen last year due to tight supplies and resilient demand. GM CFO Paul Jacobson has said that Q1 sales were up 18%, and the company expects to report results that are in line with its expectations.

Cost-Cutting Measures in Focus

Investors will be looking for further details on GM’s plans to cut $2 billion in structural costs by the end of 2024, including the employee buyout program that forms a significant part of these efforts. About 5,000 employees globally opted for the buyouts, which are expected to result in a $1 billion charge during Q1. Wall Street will also be watching for information on adjusted earnings before interest and taxes and adjusted earnings per share in 2023, which are forecast to be between $10.5 billion and $12.5 billion and between $6 and $7, respectively. Adjusted automotive free cash flow is expected to be between $5 billion and $7 billion.

Slow EV Production and Industry Landscape

GM has been slow to ramp up its electric vehicle production, and investors will be looking for any updates on this front. Additionally, commentary on the current EV landscape following price cuts from industry leader Tesla will be of interest.

Analysts Cautiously Optimistic Amid Economic Concerns

Analysts are cautiously optimistic regarding Q1 earnings for much of the automotive industry amid broader economic concerns. While Morgan Stanley analyst Adam Jonas suggests that the quarter will be “solid” with “optimistic” outlooks, he notes that investors may not respond well to uncertainty in the macroeconomic environment. GM shares have performed lacklusterly this year, up only 2% and closing at $34.29 per share on Monday, down from a 52-week high of $43.63 per share.

This is a developing story, and further updates will be available soon.


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